up front if there might be concerns about getting a low appraisal when a buyer is getting financing for the home . If the house isn ’ t that different from many other homes nearby — pricing can be very clear and straightforward . But pricing gets tricky when you have a unique home that is different from others . For example if you have a high-end or custom-built home that is a one-of-akind , it can be nearly impossible to find a comparable property that mirrors well with yours . Which is why we have to examine each comp carefully to judge how homebuyers would value the differences between the available comps .
As previously mentioned , we try to understand and follow the appraiser ’ s process , but we also follow our own personal instincts . We evaluate how buyers are likely to react to each home , based on what we ’ ve learned about those buyers ’ specific wants and needs . Details like which direction a house faces can impact buyers ’ preferences , as well as how long a home stays on the market , and the pricing it gets . Comps can be skewed by features that might not be obvious on the sold comp because the agent didn ’ t list all of its unique features — or maybe adequate pictures of the sold comp aren ’ t available for the appraiser to evaluate . So looking at sold comps , we might look back further to try to find a comp that was very close in style and size for what would mimic buyer behavior on our current listing , because that might give us a clue to how a home is going to perform on the market . Many times we can ’ t necessarily use an older comp as a true comp of what an appraiser is going to use , but it might help us understand what will happen once we put that property on the market .
We take extra time with sold comps and really try to evaluate something other than a small radius of homes that have sold in the last six months . Otherwise , we might be missing some clues that will help us understand what to expect when a home gets listed .
Pending comps are great because they show what buyers are actually taking action on now . Sometimes we look at pending comps on homes that are in a similar area but are maybe smaller or bigger than the house we ’ re listing , because we want to see what buyers are reacting to . What are they trending toward ? Why did they pick that house over other homes listed for sale ? That house will give clues to what buyers are taking action on , so we can leverage that knowledge to help us understand the pricing of a home .
Active comps are a really valuable tool when used correctly . Again , they ’ re not typically used in a traditional appraisal sense , but active comps are what you ’ re actually going to be competing against . We see many agents not even look at active comps and just focus on sold and pending comps when they ’ re trying to figure out their valuations . On the flip side , we see homeowners that only focus on active comps to determine what they believe their home is worth . Sold comps and pending comps are going to be more
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